Operators feel the squeeze

Two in three companies providing residential care are being forced out of the market, according to new research by financial analysts Plimsoll Publishing Ltd. Plimsoll has placed these 625 companies in the “danger” financial rating in their latest analysis. The new study, based on the top 1000 companies in the industry, places each company in one of five groups based on their financial standing over the last four years Â­ strong, good, mediocre, caution and danger. Plimsoll senior analyst David Pattison said he believed that in the residential care sector, there were too many companies chasing too little market. “These companies (in the Å’dangerÂ¹ group) have been in decline for years with a combination of increasing debts and low margins,” Mr Pattison said. “Many are at a stage where their debts are severely restricting the ability of the management to make even normal business decisions. In another study by Plimsoll, 78 per cent of 83 recent company failures in the residential care sector were placed in the